Queste’s Cash Flow Shows Strength but Operating Losses Persist

June Cash Flow Highlights

Queste Communications Ltd released its monthly cash flow report for June 2025, revealing a mixed but ultimately positive liquidity picture. The company recorded a net cash outflow of $334,000 from operating activities, reflecting ongoing expenses such as research, staff costs, and administration. However, this was more than offset by a substantial $3 million cash inflow from investing activities, primarily due to a consideration received by its controlled entity, Orion Equities Limited, following the termination of an iron-ore royalty.

Investing Activities and Strategic Holdings

The $3 million inflow from the royalty termination marks a notable event for Queste, underscoring the value of its investment portfolio and strategic interests. Queste holds a 59.86% stake in Orion Equities Limited, which is consolidated in its financials. Orion itself holds significant investments in other listed companies, including Strike Resources Limited and Bentley Capital Limited, adding layers of liquidity and potential upside. These holdings are regarded as liquid assets, supplementing Queste's cash reserves and providing flexibility for future operational or investment needs.

Financing and Liquidity Position

On the financing front, Queste reported a modest net cash outflow of $20,000, with a small inflow of $45,000 from financing activities partially offset by transaction costs. The company maintains a loan facility with Orion Equities, allowing advances up to $400,000 at an interest rate of 10% per annum, maturing in December 2025. At month-end, Queste held $4.1 million in cash and equivalents, alongside $100,000 in unused financing facilities, positioning it with an estimated 373.5 months of funding available based on current cash burn rates.

Related Party Transactions and Governance

The report disclosed payments totaling $30,000 to related parties and their associates, a detail that investors will watch closely for transparency and governance implications. The statement was authorised by Executive Director Victor Ho, who affirmed compliance with accounting standards and the accuracy of the cash flow disclosures.

Outlook and Considerations

While the operating cash outflow signals ongoing expenditure pressures, the strong investing inflow and robust cash position provide Queste with a solid buffer. The termination of the iron-ore royalty appears to be a one-off event, so future cash flows will be closely monitored to assess sustainability. The company’s strategic investments and loan arrangements with Orion Equities add complexity but also potential avenues for liquidity management and growth.